Samagi Jana Balawegaya MP Dr. Harsha de Silva speaking to reporters yesterday
- Questions why Govt. raise $200m through local ads if macro fundamentals are strong and rating downgrades have no impact
- Said different ministers painting different pictures to the public
- Questions about the reasoning behind Gammanpila asking for debt rollover if Cabraal’s positive statements are true
- Calls for clarity from the government. on debt repayment challenges for 2021
- Warns that record stock market performance requires vigilance
By Asiri Fernando
Leading opposition parliamentarian Dr Harsha de Silva yesterday accused the government of following a ‘two-faced’ policy on debt management by reassuring the public of a sound economy while issuing advertisements calling on investors to buy $200 million worth of bonds this month.
Samagi Jana Balawegaya (SJB) Dr Harsha de Silva, MP, speaking at a press conference, accused the government of frequently defending its economic policy inside and outside parliament, saying that confidence investors was increasing and that the government would not seek support from the international community. financial institutions such as the International Monetary Fund (IMF) to manage its debt repayment requirements in 2021.
However, he pointed out that the same government has issued announcements calling on dual citizens, foreigners and foreign entities, licensed banks and licensed finance companies, among others, to purchase $200 million worth of bonds which will be released by the Central Bank this week. The newspaper announcement says bids can be submitted Jan. 15-19, with the settlement date set for Jan. 22.
He also pointed out that co-Cabinet Spokesperson and Energy Minister Udaya Gammanpila earlier this week called on creditors to defer some of the $6.86 billion in debt due in 2021, acknowledging that it would be a “great help for the country”.
“The government sends Minister of State Ajith Nivard Cabraal to Parliament where he paints a rosy picture of the economy and says the country does not need help from organizations like the IMF to better manage loan repayments. the debt. Cabraal said economic policies were working well and investor confidence was growing. But then we have Cabinet co-spokesperson Udaya Gammanpila appealing to creditors a few days later,” Dr de Silva said.
“Who is telling the truth? Is it the Minister of State in charge of the subject who paints a beautiful picture of the economy every day or the co-spokesman of the Cabinet? Mr. de Silva questioned, accusing the government of be inconsistent and opaque in communicating its economic policy and debt repayment strategy to the public and other stakeholders.
Sri Lanka’s sovereign rating was repeatedly downgraded by all three international rating agencies last year after the impact of COVID-19 worsened an already tight fiscal situation and the budget for 2021 failed to introduce measures to significantly increase government revenue to address deficit issues and establish debt sustainability. sustainability strategy.
Experts believe that the government chooses to raise funds from different sources mainly encouraging domestic or Sri Lankan investors through advertisements for $200 million as it faces high interest rates in the markets. international financiers after the ratings downgrade.
Dr de Silva argued that the government claims to have taken effective measures to control the devaluation of the rupee, but insisted that these claims were exaggerated. “If you go online now, Wednesday, and check the dollar exchange rate on the Central Bank website, you will see the buy rate at Rs. 197. So how can we believe what the government ?
The parliamentarian called on the government to disseminate accurate information to the public and raise awareness of the challenges that Sri Lanka still faces on the debt and macroeconomic fronts.
He also warned that the stock market’s record performance may not last as it is not based on economic fundamentals and warned that there could possibly be a downturn which could impact many investors, especially the inexperienced.
“The Colombo stock market has seen pump and dump patterns before and investors and regulators should be cautious.”
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